Dollar Attempting to Relaunch Rally, SPX 500 Poised to Follow

Talking Points:

• US Dollar Begins to Validate Bullish Chart Setup
• S&P 500 Signals Recovery Ahead at Key Support
• Crude Oil Reclaims $98.00, Gold Hits 5-day Low

Can’t access to the Dow Jones FXCM US Dollar Index? Try the USD basket on Mirror Trader. **

US DOLLAR TECHNICAL ANALYSIS – Prices are starting to rise as expected after putting in a bullish Piercing Line candlestick pattern above support at 10661, marked by the bottom of a rising channel set from November and the 23.6% Fibonacci retracement. A break above initial resistance at 10718 – a horizontal pivot – targets the January high at 10756 and the channel top at 10787. Alternatively, reversing below support exposes the 38.2% Fib at 10602.

Daily Chart - Created Using FXCM Marketscope 2.0

** The Dow Jones FXCM US Dollar Index and the Mirror Trader USD basket are not the same product.

S&P 500 TECHNICAL ANALYSIS – Prices put in a bullish Piercing Line candlestick pattern above support at 1773.30, marked by the 38.2% Fibonacci retracement and a rising trend line set from November, hinting a move higher is ahead. Near-term resistance lines up in the 1809.60-20.60 area, with a break above that exposing the January 15 high at 1851.40. Alternatively, a reversal below support initially exposes the 50% Fib at 1749.20.

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS – Prices turned lower as expected after putting in a Bearish Engulfing candlestick pattern at 1267.71, a support-turned-resistance level set from early October. Initial support is at 1235.57, the 23.6% Fibonacci expansion, with a break below that targeting the 38.2% level at 1208.88. A turn above 1267.71 eyes the January 27 high at 1278.72.

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS – Prices broke resistance in the 97.71-81 area, marked by the 38.2% Fibonacci expansion and the January 23 high. The bulls are now taking aim at 98.49, the 50% level, with a further push beyond that targeting the 61.8% Fib at 99.27. Alternatively, a turn back below 97.71 targets the January 27 low at 95.19.

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

To receive Ilya's analysis directly via email, please SIGN UP HERE

Contact and follow Ilya on Twitter: @IlyaSpivak